News Column

As Cashless Policy Goes Nationwide

June 30, 2014

As the cashless policy introduced by Central Bank of Nigeria (CBN) goes nation-wide today, July 1st 2014, this newspaper urges Nigerians and indeed all stakeholders to support and ensure the successful implementation of the policy in the country. We believe that the policy whose objective is to reduce huge physical cash in circulation as well as encourage electronic transaction would transform the quantity and efficiency of Nigeria's payment system.

Initially introduced in Lagos in 2011, cashless transaction became effective in Abuja, the federal capital territory and the five states of Abia, Anambra, Kano, Ogun and Rivers in October 2013. On the back of the successes of the scheme observed in these states and the federal capital territory, the Apex bank decided to the remaining thirty states in the country.

Under the policy, CBN pegged withdrawal by individual and corporate accounts at N500,000 and N3 million respectively. Charges fees for withdrawal above the limits of individuals and corporate accounts are pegged at 2% and 3% respectively. However, ministries departments and agencies, (MDA), diplomatic missions, embassies, multilateral, aid donor agencies and specialized banks are exempted from the policy penalties and charges. While deposit and lodgment charges are to continue in the seven states where the scheme was earlier launched, the CBN has decided to grant a one-year waiver on the applications of withdrawal charges in the thirty states set to roll out the policy.

No doubt Nigerians are skeptical about the success of the new cashless policy. Infact, mixed reactions had earlier followed the implementation of the policy in the seven states and FCT with a majority believing that it did not work as expected because of corruption and unavailability of infrastructure and technology. Nevertheless, we think Nigerians should give the policy a chance to succeed.

Indeed the cashless policy if properly implemented should reduce inflation and curtail the illicit act of money laundering in the country. Over time monetary watchers have opined that a reduction in the huge cash manually transacted in the country could lead to a reduction in inflation rate. Besides, there is the need for the country's monetary system to fall in line with international best, which cashless policy exemplifies.

Perhaps for this policy to be successful, the apex bank needs to embark on a massive enlightenment programme. This is because key businesses, especially the small scale enterprises seem not to understand yet what the cashless policy is all about. Indeed, the banks need to organize the forums were key stakeholders especially customers would be educated and their fears on the new policy allayed. Even in the area of infrastructure, it is important that the apex bank increase the number of point of sales terminals in the country for the convenience of end users.

Despite the technological hitches and security of funds which have become a recurring issue since its pilot scheme in the seven states, we certainly believe the policy would succeed. What is needed is for Nigerians to be patient and allow the banks to perfect the policy.

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Source: AllAfrica

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